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Rupee hits 6-month low as weak economic growth worries investors

The benchmark BSE index fell 0.5 percent, while the broader NSE index was 0.4 percent lower

Reuters  |  Mumbai 

Rupee
Illustration by Ajay Mohanty

The rupee weakened to its lowest in six months as concerns over and uncertainty over the government's implementation of reform measures hit foreign investor sentiment.

The rupee was at 65.3275 to the dollar after falling to 65.3550, its lowest since March 24, on corporate dollar purchases and dollar outflows from equity markets, said dealers. The Indian currency had ended at 65.12 on Monday.

The benchmark BSE index fell 0.5 percent, while the broader NSE index was 0.4 percent lower.

"There is panic among foreign on fiscal stimulus and growth," said one dealer at a foreign bank.

India's slowed to a three-year low of 5.7 percent in the June quarter, prompting the government to plan several steps including fiscal stimulus which would push the fiscal deficit wider than budgeted.

The concerns over weak fundamentals has led to foreign pulling out dollars from India's stock So far this month, India has seen a net outflow of $359 million led by a sell-off in stocks.

"Debt are also worried but they are hedging their forex risks while equity are pulling out," another dealer said.

First Published: Tue, September 26 2017. 12:06 IST
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